I propose that we call this relationship the “line to serfdom”... a more accurate description of the high inequality/low mobility relationship.... Let’s first begin with the line to serfdom itself. Figure 1 has the full data set from University of Ottawa economist Miles Corak’s paper, which includes 22 countries instead of the 11 countries included in the Winship and Schneider analysis (it is unclear why they decided to cut half of the countries from their comparison). I used mobility data from Figure 1 of Corak’s paper and Gini data from the World Bank to create Figure 1:

This graph indicates an inverse relationship between inequality in a country and economic mobility between generations.... READ MOAR

With this in mind, let’s turn to the three points Winship and Schneider make....

Winship and Schneider contend that the analysis should have been done using the Luxembourg Income Study’s Gini coefficient because it “has taken great care to make each country’s measure as comparable as possible.” I do not have strong feeling.... I have reproduced the inequality/mobility relationship using LIS data in Figure 2 below. Five of the 22 countries included by Corak were not in the LIS data set (Argentina, Chile, New Zealand, Pakistan, and Singapore), so this chart includes only 17 countries. Winship and Schneider used only 11 countries and found a slightly flatter line than the original. In contrast, when we include the data omitted from their work, we find an even steeper line. Therefore, when using Winship and Schneider’s preferred measure of inequality, higher levels of inequality indicate much lower levels of mobility than using the World Bank’s numbers....

When more data are included, the relationship between inequality and mobility is strengthened, not weakened using their preferred inequality measure....

The second point made by Winship and Schneider is... that when using rank correlation... the international relationship between inequality and mobility is murkier.... They focus on a positive relationship between mobility and inequality when comparing three countries: Canada, Sweden and the United States. The fact that this conclusion relies on only three data points indicates that it does not result in a reliable regression. In other words, the data are simply not sufficient to draw meaningful conclusions....

Winship and Schneider also charge that inequality has risen but mobility has not fallen, suggesting inequality and immobility are not related.... While the data indicate that mobility has been generally flat for birth cohorts from 1971 to 1993 despite rising inequality, in the same time frame the U.S. economy nearly doubled, racial desegregation efforts went into effect, and opportunities for women grew substantially. Despite all the social progress and economic gains, economic mobility did not rise. Perhaps absent these changes, mobility would have fallen....

While this may sound like the standard “OMG-someone-is-wrong-on-the-Internet” response, in this case being wrong carries important consequences. The Winship-Schneider piece is part of a narrative that economic mobility and inequality are unrelated and therefore policymakers’ attention to economic inequality is misplaced. These claims are not supported by the data or by published economic literature. There is much more analysis to do before one can make claims delinking economic inequality and mobility—just as there is plenty of analysis to consider when examining whether there are links between income inequality and economic growth.

I propose that we call this relationship the “line to serfdom”... a more accurate description of the high inequality/low mobility relationship.... Let’s first begin with the line to serfdom itself. Figure 1 has the full data set from University of Ottawa economist Miles Corak’s paper, which includes 22 countries instead of the 11 countries included in the Winship and Schneider analysis (it is unclear why they decided to cut half of the countries from their comparison). I used mobility data from Figure 1 of Corak’s paper and Gini data from the World Bank to create Figure 1:

This graph indicates an inverse relationship between inequality in a country and economic mobility between generations.... READ MOAR